Cyprus bond yield gap with bunds remains at 50bps

The 10-year bond yield remained steady, declining marginally to 4.26% from 4.28% before following the latest auction carried out on October 5, but the 50bps gap with comparable German 10-year bunds prevailed with the German bund yielding 3.76%, according to Financial Mirror data.

The yield on the 5-year bonds made a big move, from 3.51% agreed at the last auction compared to 4.11% now, but that was due to the long absence of the government from the 5-year note paper.

The Central Bank of Cyprus conducted an auction on 05 October 2006 for up to CYP 50 mln, 4.25% Government Registered Development Stock (GRDS) with an issue date 01 February 2006, repaid at par in five years (2011). The total amount of bids reached CYP 71.095 mln, of which CYP 50 mln were accepted at an average rate of 4.11% (CYP 100.56 per CYP 100 nominal value). The lowest and highest prices of the competitive bids accepted were CYP 100.31 and CYP 100.91, respectively, for CYP 100 nominal value, representing annual yields of 4.17% and 4.02%, respectively.

The CB also conducted an auction for CYP 30 mln, 4.5% Government Registered Development Stock with an issue date 09 October 2006 and maturity of 10 years (2016).

The total amount of bids reached CYP 70.6 mln, of which CYP 30 mln were accepted at an average distributed rate of 4.26% (CYP 101.9 per CYP 100 nominal value). The lowest and highest prices of the competitive bids accepted were CYP 101.29 and CYP 102.2, respectively, for every CYP 100 nominal value, representing annual yields of 4.34% and 4.23%, respectively.

The Central Bank of Cyprus announces the issue of up to CYP 6 mln Government Registered Development Stock (GRDS) with three years duration and interest of 3.75% per annum payable every six months.